If tariffs are canceled, will prices go back down? |
If tariffs are canceled, will prices go back down?
(NEXSTAR) – The Supreme Court’s stunning decision to strike down the bulk of President Donald Trump’s tariffs was taken as good news for some and bad news for others, depending on whom you asked. But what about for the everyday American?
The tariffs have been cited as a driving force behind inflation and the rising prices of everything from groceries to clothing and cars. If the tariffs are thrown out, does that mean we’ll see prices start to plummet?
It’s very not likely, economists say. The economic principle of “sticky prices” is at play here, NPR reports.
Put simply, “stickiness” refers to how prices can respond slowly to changes in the broader economy. Sellers may be reluctant to change the price of a good even when there’s a change in demand for the product or the cost of making it, Investopedia explains.
Even if tariffs are rolled back, companies may be hesitant to lower prices immediately as the future remains uncertain. Some businesses may still be trying to catch up with the rising costs they’ve been paying.
“They haven’t been able to pass it through completely yet, waiting to see what would happen,” Mary Lovely, a senior fellow at the Peterson Institute for International Economics, told NPR in an interview. “So........